Powell: Facebook Troubles Expose 'Mythology' of Openness

Facebook basically facilitates "precision propaganda" that can be used for good or evil, so its current troubles in Washington over the Cambridge Analytica user data mining were predictable and symptomatic of an issue that needs addressing in Washington.

That is according to Michael Powell, president of NCTA-The Internet & Television Association, in an interview for C-SPAN's Communicators series.

Powell has been pushing Washington policymakers to start looking at edge providers when they talk about powerful media companies and their potential harmful impacts, something that has been primarily reserved for internet access providers, which NCTA represents.

He suggested the initial period of "euphoria and government celebration and subsidy," which he said broadcasting and cable also enjoyed, was giving way to a recognition that the edge was big enough, powerful enough, intrusive enough and incentivized enough to do things that could potentially harm society.

Regulators have started to scrutinize those providers, Powell said, agreeing that it was an inflection point in the relationship of government and the edge.

Related:  Powell Says Net Neutrality Debate Increasingly Irrelevant

To ignore what Netflix or YouTube do doesn't make sense, he said.

Powell said the Facebook troubles also demonstrate the "mythology" that openness is always good and information "always wants to be free and available."

He said he didn't think folks have been thinking through the ability of evil to inject itself into the virtuous garden from the edge.

Powell called this an extraordinary moment, but one that was predictable given what he said was the government's desensitization to that risk. He said there was now an "awakening" to a more comprehensive conversation about how to think about companies that derive enormous profits from "massive, intimate data sets" that they monetize, particularly when those platforms are open.

He said the topic would likely dominate regulatory discourse.

Asked about the Justice Department's antitrust division suit against AT&T-Time Warner, Powell, himself a former antitrust attorney at Justice, said he thought the department was trying to reinvigorate the doctrine of the dangers associated with vertical integration.

At a speech this week to Vanderbilt University, antitrust division chief Makan Delrahim said as much, invoking that 1950s doctrine.

Powell said he did not think the DOJ had a particularly strong case, though he said he has not followed it that closely. But he said the DOJ's suit would have "significant impact on future mergers and raise questions about existing ones." Delrahim this week also spoke of the implications for future mergers of that and other cases.

Powell also said Justice may be looking at "yesterday's problem." He said most online video platforms are closed and integrated, which are "vertically Apple, or vertically Amazon, or vertically Google or Facebook."

"They are all hoping you will live in those narrow tunnels," Powell added.

He also said consumers have no meaningful way to protect themselves from tracking. 

"Delete your Facebook profile, fine, you're still tracked by Facebook; you're still tracked by Google," he said.

"I don't think consumers have any genuine way to protect themselves from fake news, or Russian interference, or sex trafficking, or illegal pharmaceuticals or pirated content," Powell said. "The consumer can't do it. The infrastructure companies can't do it."

The government doesn't want ISPs to prioritize or sort content, Powell elaborated. Only Google or Facebook know how to turn down the algorithm or filter it.

Powell said that the "move fast and break things" model can't apply to human society.

Asked why cable operators should be trusted with their subscribers' data, Powell responded that the issue was the asymmetry, where the FCC was focused on infrastructure providers, while they are an increasingly small part of the overall internet ecosystem and no longer the drivers of what is happening.

He said to protect consumers, locking the front door (ISPs) does no good if the back door (edge providers and other tech companies) is left completely open. He said that is no protection at all.

He also said NCTA's members have to be more diligent because they have subs whose money they take. He said that value chain is pretty transparent. If cable operators do their jobs poorly, they face cord-cutting consequences. He said the problem with edge providers and tech companies is that they are anonymous. He said Facebook's core model is to monetize information, which is not cable's core model.

But don't cable operators want to monetize their data? Sure, Powell said, just as all businesses are trying to figure out how to monetize Big Data. He suggested NCTA members are trying to improve the customer experience through that data, but cautioned against the comparison with the edge. 

"No company in the infrastructure industry has the kind of surface area that Google does for the collection of data," Powell said. "They own 0% of the mobile, wireless platform. They own 80-90% of all searches."

During the interview Powell frequently referred to NCTA members as "infrastructure" companies," smart branding at a time when promoting broadband infrastructure is a big focus in Washington

He said the fact that cable can see some of what users are watching in an anonymous way is not anywhere close to the breadth and depth of what Google can see, and added that cable would never rival that, nor try to do so.

The Powell Communicators episode airs Saturday, March 31, at 6:30 p.m. on C-SPAN and Monday, April 2, on C-SPAN2 at 8 a.m. and 8 p.m.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.